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VICTORIA — The B.C. Legislature’s handling of its almost $70 million annual budget is such a mess that Auditor-General John Doyle says he can’t tell whether any money is missing or has been improperly spent.

On Thursday, Doyle released a scathing audit of the taxpayer-funded operation that pays MLA salaries and expenses, and runs the daily business — everything from Hansard to security — at the provincial legislature.

The 17-page document revealed Doyle’s team had to correct or properly record a cumulative $1.3 billion in transactions over many years before they could even begin to reconcile the Legislature’s finances.

It also found that the Legislative Assembly was paying the balances on credit cards MLAs use for travel expenses without documentation, an amount that would likely range into the hundreds of thousands of dollars each year.

Doyle also found the legislature is not producing audited annual reports, normal practice for any public body.

“It’s really bad,” said Doyle, who has probed some of the biggest organizations in government.

Asked whether he knows if any money is missing from the legislative accounts, Doyle replied: “We don’t know.”

“So far, this audit has taken more effort and energy in regard to my staff doing this work than some of the largest organizations in this province,” he said.

“We had to restrict ourselves eventually to just correcting the errors rather than delving even deeper into the financial transactions, and that’s what I propose to do at some time in the future, is to actually dive deeper into the transactions to make sure that they’re all appropriate.”

Doyle, who began issuing warnings to legislative management in 2007, added that even basic accounting practices were being ignored.

He said that in March 2011, the Legislative Assembly’s internal financial records strayed from what was in the bank by $133 million.

“It’s like you looking at your bank account and it’s got zero on the bank account, and yet your financial records show that you’ve got $130 million overdrawn,” he said.

“That’s how far wrong they were in what they were doing.”

Doyle added he sees no reason why the legislature should be exempt from having to produce annual reports.

“There’s more than 100 organizations in the government reporting entity that complete financial statements and do performance indicators,” he said.

“Why should the Legislative Assembly be so secret?”

A committee of MLAs chaired by Speaker Bill Barisoff called the Legislative Assembly Management Committee (LAMC) is charged with overseeing operations at the legislature.

On Thursday, Barisoff acknowledged there were issues in the audit, but attributed them to a conflict over accounting procedures.

“It comes down to accounting procedures that the [Legislative] comptroller thinks should go one way and the auditor-general thinks should go the other way,” said Barisoff, who is also a B.C. Liberal MLA.

Speaking from Penticton, he added the legislature has now brought on a consulting firm, a former government accountant and a former auditor-general to help deal with the issue.

“As we ended up over time we could see we either had a personality conflict or we had a conflict between how the comptroller and the auditor-general thought things should be reported and at that point in time we decided we needed to bring someone else in,” he said.

Doyle’s response was swift.

“I think the Speaker might not appreciate the gravity of the findings and hasn’t yet quite worked out what this means properly, and what his responsibilities are,” he said.

Doyle added he first highlighted the issues in a 2007 audit.

He said he also sent multiple management letters to the Clerk of the House, then George MacMinn, and to Legislative Comptroller Dan Arbic, warning of the significant issues that had yet to be addressed.

He said these letters would have been shared with the Speaker.

In his audit, Doyle said the legislature’s management sent the issue to LAMC, even though it was clear the organization rarely meets and “does not appear to be actively involved in the Legislative Assembly’s operational activities.”

On Thursday, Craig James, who was last year replaced MacMinn as Clerk of the Legislative Assembly, issued a statement saying much has already been done to fix the situation.

“To date, the Assembly has already resolved key issues identified in the 2012 audit report. Stronger financial processes have been put in place to resolve concerns regarding bank reconciliation and management oversight. Improved inventory record keeping has been developed, and the assembly is in the process of determining how best to address other departures from Generally Accepted Accounting Principles,” James said, adding more will be done in future.

“We recognize that the shortcoming of previous financial practices must continue to be corrected and further progress will be made at the earliest opportunity.”

Government House leader Rich Coleman, who sits on the LAMC, was out of the country Thursday and could not be reached for comment.

New Democratic Party house leader John Horgan, who also sits on the committee, said he was “surprised and disappointed” by the audit findings.

“I think it’s an embarrassment for all members of the legislature. This isn’t a partisan issue. This is an issue of our ability to manage our affairs and I think the public, when they look at this, are going to shake their heads in disappointment and that’s a slight for all of us,” he said.

Horgan also said he believes LAMC is “too secretive” and in need of a major overhaul.

“The internal financial practices have been out of control. You hire people to manage those affairs but then you have to manage those people. The governance of the LAMC committee has failed in that regard,” he said.

“I think the politicians, myself included, need to take responsibility for that.”

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